H-1B uncertainty grows as US weighs ending 60-day grace period for laid-off workers

The proposal from the US Department of Homeland Security (DHS) is reportedly moving through the federal regulatory review process.

It has not yet become a rule, and the full details of the proposed changes have not been made public.

The White House Office of Management and Budget is reviewing the proposal as part of the regulatory process.

If ultimately adopted, the change could significantly alter the outcome for certain foreign workers when employment linked to their immigration status ends before their authorised stay expires.

The potential impact is particularly significant for Indian professionals. Indians accounted for 71 percent of all approved H-1B petitions in fiscal year 2024, according to US Citizenship and Immigration Services (USCIS).

What is the H-1B 60-day grace period?

The existing provision allows eligible non-immigrant workers whose employment ends to remain in the US for up to 60 consecutive days, or until the end of their authorised validity period, whichever comes first.

The provision applies to workers in several visa categories, including E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 and TN, as well as their dependants.

USCIS says the grace period is discretionary and allows eligible workers to pursue options such as finding a new employer or applying for a change of status.

The provision was introduced through a DHS rule that took effect in January 2017.

It was designed to give highly skilled foreign workers greater flexibility when employment ended before their immigration authorisation expired.

For an H-1B worker suddenly laid off, the window can be critical.

It provides time to search for another employer, pursue a new H-1B petition or explore another immigration status without immediately losing lawful status.

What could change under the proposal?

The proposed change could eliminate that regulatory grace period rather than simply shorten it.

DHS already has discretion under the existing regulation to eliminate or reduce the period in individual cases, but the proposed move would represent a broader change to the current framework.

Without the 60-day protection, a worker whose employment ends could face a much tighter immigration timeline.

The loss of employment would no longer automatically provide the same period in which to secure another position or pursue an alternative status.

USCIS currently states that workers affected by termination may have several options, including filing for a change of non-immigrant status, applying for adjustment of status, seeking employment authorisation in certain circumstances or becoming the beneficiary of a non-frivolous petition from another employer.

The proposed policy could therefore make the timing of those applications far more consequential.

Why Indian H-1B workers could be particularly exposed

The potential change has drawn attention in India because of the country's overwhelming representation in the H-1B programme.

USCIS data show that 283,755 approved H-1B petitions in fiscal year 2024 involved beneficiaries born in India, representing 71 percent of all approved petitions.

China was the second-largest country of birth, accounting for about 12 percent.

That concentration means any major change affecting H-1B workers is likely to have a disproportionate impact on Indian professionals employed in the US.

The issue also extends beyond individual employees.

H-1B workers often have families in the US, meaning a change to the principal worker's immigration position can affect dependants as well.

The existing grace-period framework expressly covers dependants of eligible workers.

A rule that was created to provide flexibility

The 60-day provision emerged as part of a broader effort to make employment-based immigration more flexible for highly skilled foreign workers.

Before the regulatory change, workers whose employment ended could face immediate immigration complications.

The 2017 rule introduced a grace period of up to 60 consecutive days during each authorised validity period for eligible categories, including H-1B.

The provision does not, however, amount to an unrestricted right to remain or work.

USCIS has clarified that workers cannot simply continue employment during the grace period unless separately authorised.

The period instead provides a limited opportunity to address their immigration situation following the end of employment.

The existing regulation also allows DHS to shorten or eliminate the period at its discretion, underlining that the 60 days is a maximum rather than an unconditional entitlement.

Proposal remains at an early stage

The possible removal of the grace period remains a proposal rather than an implemented immigration rule.

The DHS regulatory agenda currently lists an H-1B reform proposal under RIN 1615-AD00, with a proposed rule scheduled for August 2026.

The publicly available description covers wider H-1B programme reforms, including eligibility, employer compliance and oversight of third-party placements.

The specific proposal concerning the 60-day grace period is still moving through the federal review process, and the full regulatory text is not yet publicly available.

Reports indicate that the proposal has been sent for review by the White House Office of Information and Regulatory Affairs.

That means the eventual scope, implementation date and precise effect on workers remain uncertain.

For now, the existing 60-day framework remains the operative rule. But the proposal has put renewed attention on one of the most important safeguards available to H-1B workers when an unexpected job loss threatens their ability to remain in the United States.